Toyota accelerates plans for mass-market green cars

The world's biggest carmaker, Toyota, has thrown down the gauntlet to its cash-strapped American rivals by accelerating plans to develop mass-market cars powered by biofuels and by plug-in electric batteries.

Toyota last year overtook General Motors to sell more vehicles than any other auto manufacturer. The Japanese company, already famed for its hybrid electric Prius car, wants to open up an environmental gap with its competitors.

"I believe we will all remember 2007 as the year that the world responded to a wake-up call too long ignored," said Toyota's president, Katsuaki Watanabe, in a speech at the Detroit motor show.

Toyota is expanding its joint venture electronics factory with Panasonic, adding an assembly line for state-of-the-art lithium batteries in readiness for selling "significant fleets" of plug-in vehicles globally by 2010.

The carmaker is increasing investment in research to produce ethanol from wood waste and is installing clean-diesel engines in two popular models — the Tundra truck and Sequoia sports utility vehicle.

Toyota, which has a target of selling a million hybrid vehicles annually within a decade, set out its ambitions at a motor show deeply infused with environmental technology — albeit with some traditional American gas-guzzlers thrown in. To an accompaniment of gospel singers and bongo players, GM showcased an early-stage "concept" vehicle called the Cadillac Provoq powered by a combination of hydrogen fuel cells and lithium ion batteries.

But with a flourish, GM's product development chief declared that he was moving from "green to mean" by unveiling the new Cadillac CTS-V — the fastest ever four-wheel sedan with a 550 horsepower engine capable of going from a standing start to 60mph in less than 4.5 seconds.

Commentators have pointed out that in spite of their talk of environmental development, the two biggest product launches of the show — Ford's F-150 and Chrysler's Dodge Ram — are heavyweight pick-up trucks.

The Detroit Free Press's motoring critic, Tom Walsh, described this as an "utter thematic contradiction", asking: "Is [the motor show] the greenest place on earth this week? Or gas-hog heaven all over again?"

Battered by Asian competition, America's big manufacturers have barely recovered from a slump which almost sent GM and Ford into bankruptcy — and with the US economy slowing, they are reluctant to gamble solely on green technology.

"The prospect of the sub-prime mortgage crisis spreading into car buying is concerning," said David Healy, an auto analyst at Burnham Securities. "You're going to see very, very conservative production schedules from the auto makers and financial reports are going to be pretty ugly this year."

He added, however, that hard-fought new employment agreements with the United Auto Workers union had closed a once gaping difference in production costs between US and Japanese manufacturers. The contracts, which caused brief strikes at Chrysler and GM, have sharply reduced US auto makers' exposure to pension and healthcare expenses.

"The big two [Ford and GM] are not in a critical state — they've got a lot of liquidity to see them through a possible recession," said Healy.

Among the British-based exhibitors at the show was Mini, which trumpeted an 18.5% rise in sales to a record 222,000 vehicles in 2007. BMW's sales chief, Stefan Krause, confirmed rumours that Mini's next model would be a "crossover" vehicle with off-road features.